The New Yellow Metal in Town
Source: Jeb Handwerger, Gold Stock Trades (12/1/10)
"Uranium price hits two-year high."
International demand for U308 is rising. Knowledgeable investors who made a killing when uranium reached a $136 a pound in June 2007 are, once again, in accumulation mode. The Russians, Koreans and, particularly, Chinese are investing in joint ventures all over the world to gain control of future supply. In fact, our contract for Russian dismantled nuclear warheads expires in 2013—not far away. This will further exacerbate the supply and demand deficit.
China is likely to purchase offtake agreements with uranium miners who do not have any. It is important to find the miners who are in the driver's seat. This is a miner's market to catch a solid big at higher levels. Certain miners who are close to producing uranium that is not yet purchased are set up to reap the benefits of this hot sector.
Recently, U308 hit a 24-month high of $53.50 a pound. Typically, when uranium begins to make its upward move it does so with atomic force—giving large profits to the lucky holders. It is interesting to note that only eight mines in the world yield more than 50% of global production. Moreover, in reality, there is not a lack of uranium deposits but there is a lack of assets that possess production potential. Already in the United States, there are 104 plants with more coming. China has 11 plants and is constructing another 28 reactors. This does not include the existing facilities in France, Germany, Japan, Iran and others. Today's nuclear plants are sophisticated, safe and efficient—far removed from the fossils of yesteryear.
My readers, through my premium service, are enjoying triple-digit profits even at this early stage. As uranium shortages mount, I will continue to give my readers additional profitable opportunities for their consideration. Just as profits have been made by my readers in the small gold miners, I feel that certain small uranium miners are ripe as cherries for the picking.
As gold got overbought in October and I saw a coming rally in the U.S. dollar, I alerted my readers to the junior uranium miners in Wyoming as many miners were expected to receive licenses. Some of the miners out of Wyoming have made huge percentage gains, such as Uranerz Energy Corporation (TSX:URZ; NYSE.A:URZ), UR Energy, Cameco and Uranium One, as mines have begun to receive permits to begin operation. Earlier, Uranium One received its NRC license on its Moore Ranch Project, and last week Uranerz received its draft license on its Nichos Ranch project.
Uranerz has doubled in the past month. Other miners should be receiving their licenses shortly and should be rerated by Wall Street. There are 13 other mines being developed in Wyoming. Wyoming produces the largest amount of domestic uranium with Cameco's Smith Ranch Mine, which is also the largest U.S. facility. Not all of these mines will move to production and only a select few have no local opposition and other key permits.
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